Channel Surfing

The continued advancement of consumer technology has altered many aspects of everyday life, including the way people interact with their insurers. While the growth in digital channel usage in the insurance industry may be slower than in other industries – J.D. Power & Associates’ 2012 Canadian Retail Banking Customer Satisfaction Survey shows that Canadian banking customers now interact with their branch office more frequently online than in person – the company’s 2013 Canadian Auto Insurance Satisfaction Study finds that increasing numbers of customers are using self-service and emerging channels.

The survey results reflect online responses from 11,257 auto insurance policyholders, fielded from February 20, 2013 to March 25, 2013. Overall satisfaction is based on five factors, each weighted as per the following: interaction, 25%; price, 24%; policy offerings, 20%; billing and payment, 16%; and claims, 15%.

The 2013 survey shows the percentage of Canadian customers using non-traditional channels, such as a provider’s website, has increased by as much as 7 percentage points from 2012, depending on the particular region, while interaction via customer call centre representatives has declined by 1 to 4 percentage points.

Although local brokers/agents and customer call centre representatives continue to be primary points of contact for many questions and tasks, the decline in the percentage of customers using a call centre year over year – particularly among direct consumers – is further evidence of increasing customer acceptance of new technology and the willingness to use self-service for many tasks.

Looking just at 2013, among customers interacting with their insurers, more than a quarter of direct insurance customers has done so via their insurer’s website, and almost one in six has contacted via e-mail, either on their insurer’s website or with a broker/agent or call centre representative. While fewer customers are interacting via call centre representatives, it is important to note that these more personal interactions – especially for more complex tasks, such as filing a claim – continue to be a major driver of both customer satisfaction and loyalty.

SURVEY FINDINGS

Insurer model and channel usage

While customers of insurers that use a local broker/agent model for sales and service are much more likely to interact exclusively through their local broker/agent, customers of direct insurers more frequently interact through multiple channels. Nearly 60% of direct customers who have ever interacted with their respective insurer utilized more than one channel.

Direct customers use insurer websites more often than broker/agent-served customers, and are also more likely to have interacted through e-mail, text or a smartphone app.

The web channel is the most frequently used method outside of the traditional channels (agent/broker and call centre customer service representatives, or CSRs) among both direct- and broker/agent-served customers. Among customers who use multiple channels to interact with their insurers, the web remains the most frequently utilized method outside of the traditional channels; however, it should be noted e-mail interactions are almost as prevalent.

Reason for contact

The way in which customers interact with their insurers is often driven by the reason for the contact. The most frequently cited contact reasons among direct-served customers are as follows: policy renewal; questions regarding policy coverage; to add or change drivers; to gather information; or questions related to billing.

The service channel that customers most prefer to use when contacting their insurers varies significantly depending on the reason for the contact and the insurer’s service model.

Service channel preference among direct-served customers

Direct customers typically have no access to a local broker/agent. Many of these customers prefer to use the insurer’s website for routine activities, with more than one in four indicating a preference for ordering proof of insurance cards, making a payment, updating contact information, and gathering information via the web. For more complex tasks – such as obtaining a rate quote, changing drivers or vehicles, and discussing policy coverage or price – direct customers still prefer to contact a customer call centre representative. 

WEB VALUE

Insurer sites an important resource for direct-served customers

Expectedly, customers most often cite gathering information as the reason for visiting their insurer’s website. However, policy coverage and renewal are also reasons for a high incidence of web interactions – tasks direct-served customers say that they prefer to discuss in person or via the phone. Additionally, the variety of activities that can be conducted online may have a significant impact on both customer satisfaction and retention, which further highlights the need for insurers to make certain their websites are able to facilitate a variety of activities.

Return on investment through a highly satisfying website experience

Insurers should continue investing in their websites, as website satisfaction is the lowest among all of the interaction channels. Ensuring that the technology offerings are competitive within the marketplace may lift both customer satisfaction scores and retention metrics. Insurers that are able to meet the current level of customer expectations related to website functionality may also realize a return on investment.

By providing and promoting functionality that allows customers to conduct routine or simple tasks via the website, insurers may considerably decrease the necessity for calling a customer service representative. The decrease in call centre traffic, in turn, may provide an opportunity to trim related costs.

The benefit of providing efficient services via the web is evident when examining channel usage trends among highly satisfied customers (channel satisfaction scores of 800+ on a 1,000-point scale). The percentage of these customers who have not called a call centre in the prior 12 months has increased during the past two years to 56% in 2013 from 46% in 2011.

Website satisfaction among customers who are unable to resolve their issues online is considerably lower than among those who are able to do so (703 versus 792, respectively). Further, when customers who are unable to resolve their issues via the online channel must contact their insurer through a secondary channel – typically the broker/agent or a customer call centre representative – satisfaction with that secondary channel also declines. The inability to resolve an issue online may decrease overall customer satisfaction with their insurer by 52 points. 

INVEST TO KEEP PACE

Customers’ preferences for interacting throughout all facets of their personal and business relationships are shifting, and insurers must determine where to invest resources to keep pace with industry trends and customer demands. Investments made in digital channels, such as an insurer’s website, should be a high priority given the rapid adoption of technology among consumers; moreover, the high functionality within this channel may also help reduce the number of in-bound service calls.

Despite a slight decline in usage, the call centre still serves an important role in customer satisfaction. Customers tend to use the call centre and broker/agent channels more frequently for complex interactions, such as obtaining quotes or discussing pricing options.

Ensuring that the call centre CSRs and brokers/agents are knowledgeable of insurer policies regarding coverage and that they are well-versed in behaviours of common courtesy may help ensure the delivery of a satisfying personal interaction experience to customers.